Indebted taxpayers are increasingly abandoning the settlement deals they had reached in previous years, either because they don’t have the cash to make the payments or because they are hoping for more favorable arrangements on the basis of suggestions cultivated by the government.
In end-2018 just 3.5 percent of expired tax debts were in some form of settlement plan. Two years earlier, that rate was 5.4 percent. Therefore from the already low sum of 5 billion euros of debts under settlement by end-2016, this amount dropped to just 3.7 billion in just two years. The declining trend has continues in the first few months of this year, meanwhile, ahead of the submission of a bill outlining a new system for settlements.
According to data from the Independent Authority for Public Revenue, there has been a steep drop in the so-called “effective overdue debt balance,” i.e. the share of expired dues with a good chance of being repaid. This accounted for 12.3 percent of total debts to the state in end-2016 (or 11.4 billion euros), but shrank to 8.1 percent (or 8.5 billion euros) two years later.
As the weeks go by without any definitive announcements made by the Finance Ministry, meanwhile, the pool of debts the state could collect is drying up.